Saturday, September 10, 2011

Deficits for Dummies

If you still don't get it with regards to the US Deficit, here is an illustration to make it sink in...:

Get it now?

this is how we got here (courtesy of Richard Russell):

Private and public debt surged during the period from 1971 to today increasing by $50 trillion. During the same period GDP in the US rose from $1.1 trillion to $16 trillion today. Figure the ratio of debt to GDP at about 3 to 1. In other words, it's taken about $3 trillion in additional debt to produce each additional $1 trillion in GDP.